Colorado May Drop Rocky Mountain HMO from Medicaid

Although Colorado's Medicaid program and the state's largest HMO, Rocky Mountain, failed to negotiate reimbursement rates for the coming year, a federal judge has "temporarily stopped the state" from dropping the insurer from Medicaid, the Denv er Post reports. The judge's ruling prevents the state from dropping the HMO until Nov. 13. In the meantime, the court will review the state's 2001 Medicaid reimbursement rates "to determine if they are legal," the Post reports. Colorado now pays Medicaid HMOs 95% of "what it estimates is the cost of treating Medicaid patients who aren't in HMOs." Rocky Mountain CEO Mike Weber has said that the state reimburses the HMO between $3 million and $6 million less than what it will cost the HMO to care for Medicaid patients. If the HMO is dropped, about 24,000 members would be "forced" into Medicaid's traditional fee for service plan. In addition, emergency room volumes would increase and patients would have to find new doctors, Rocky Mountain officials said. Bernie Buescher, former director of the Department of Health Care Policy and Financing, added that hospitals would be hard hit if the HMO is dropped from Medicaid. St. Mary's hospital, which cares for "large numbers of Rocky Mountain Medicaid HMO patients," could lose between $2 million and $3 million if the state drops the HMO because Rocky Mountain pays the hospital at a higher rate than the government does under its fee-for-service program. The state Health Care Policy and Financing Department has "worked diligently to cut costs in the fee-for-service program," while the state is considering other "alternatives." One proposal would allow the state to issue block grants to individual counties and another proposal would give vouchers to Medicaid members so they can purchase commercial insurance (Austin, Denver Post, 11/8).